Radio interview, ABC Adelaide - Mornings

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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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02 6277 7800

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12 December 2023

SUBJECTS: US Congress to pass AUKUS legislation; Commonwealth Support STEM Places; AUKUS workforce; Osborne Shipyard; Cost of living

SPENCE DENNY, HOST: Prime Minister's on leave at the moment until Thursday, so the Acting PM is Richard Marles. The Defence Minister is in Adelaide for a series of meetings and joins us ahead of a busy day. Minister, good morning to you.

ACTING PRIME MINISTER, RICHARD MARLES: Good morning, Spence. How are you?

DENNY: I'm well, thank you. And thanks for bringing the Canberra weather, by the way.

MARLES: Canberra was steamy. I actually don't mind this. It's nice and cool.

DENNY: Obviously, AUKUS is going to be all the talk. I want to talk about the workforce in just a minute. But before we do so, we know that US Congress needs to ratify legislation to allow Australia to buy three nuclear subs from the US. What other sort of US legislative hurdles need to be overcome that will give Australia the green light to actually building subs rather than buying them off the.

MARLES: It’s a good question. There's quite a bit of legislation in front of the Congress right now. We’re hopeful about its passage. And I was there a month or two ago, as was the Prime Minister, speaking with members of the Senate and the House about the importance of this. But in answer to your question, there are measures, for example, which allow workers from Australia to go over to the US to work on the submarines in the United States, which is not generally allowed. So, legislation needs to be put in place to enable that. That's going to be a really important opportunity for Australian workers to be able to get the skills required to then come back and build nuclear powered submarines here in Adelaide. So, that's an example. And there's a range of other sharing of technology, obviously, as you said, the actual sale of the Virginia class submarines. But the sharing of technology, the sharing of opportunities. Because this is so unusual, because the US basically doesn't allow this in normal circumstances, legislation is required in America to permit it. And that's the package which is currently in front of the Congress as we speak. And as I say, we will let the Congress do its job, but we're very hopeful about its passage.

DENNY: We know that US politics can be dynamic on occasions. Would a change in administration- Trump regaining the presidency- have an impact, potentially on the AUKUS agreement?

MARLES: Again, it's a question we get asked a lot. The answer is, I don't believe so in this sense- well, for example, in terms of the legislation that I was just describing, having the experience of going to Washington, speaking to members of the Senate and speaking to members of the House across the entire political spectrum, Republicans, Democrats, what you get is an overwhelming sense firstly, of the support across the political spectrum for the alliance with Australia, and secondly, more specifically, the support for this arrangement under the banner of AUKUS, and the provision by the US and the UK together of Australia being given the technology to build and operate nuclear powered submarines. I mean, this is something which is supported across the political spectrum in the US. So, we're very pleased with where we've got to with the Biden administration. It is a really good arrangement for Australia, but we're also confident that that's an arrangement which is supported in a bipartisan way in America. And for that matter, that's true in the United Kingdom as well, as it is here in Australia. Which is why this is a multi-decade proposition. It's going to need to have the support of governments of all persuasions in all three countries. And it does.

DENNY: At the same time, the US Studies Centre says Australia has a lot of work to do before there are sufficient workers for the AUKUS workforce.

MARLES: Well, I think that's true in the sense that one of the big challenges, maybe the biggest challenge that we face is around developing the workforce to build nuclear powered submarines here in Adelaide. But having said that, it's a challenge we feel confident that we can meet. And it's a challenge that we've started meeting. We've announced additional university places just in the last couple of weeks. A thousand here in Adelaide; 700 at University of Adelaide, 300 at Flinders, and hundreds of those will commence from next year. I mean, that's about making sure that people are getting the skills required at that level to do what will be the most high tech industrial endeavour, the biggest industrial endeavour, but the most high tech industrial endeavour in our country's history. But it's not just at the tertiary level, at the trade level there's a huge job in making sure that we get people with the right trades. That is going to require giving people opportunities to go to the US and the UK to develop those skills. But it's also about training people here in Australia. And so one of the things that we've announced is the establishment of a skills academy which will be on site at the Osborne Naval shipyard. And the building of that commences from next year and that'll be up and running in the next few years.

DENNY: In the meantime, Matt Doran, our colleague, writes today that Infrastructure Australia, their annual market capacity report, reveals there's a big shortfall in the number of workers for construction jobs. At the same time, the building industry has been critical of the way that tradespeople are going to be able to come into Australia as part of migration changes. Now, those people who come in in that way, unless they're Australian citizens, can't actually work on the AUKUS program. But the point here is that they could be deployed elsewhere. Where then, for security reasons, people who are Australian citizens can then be redeployed to working in the AUKUS workforce?


DENNY: That's a very long winded question, I realise, but there's a real shortfall of skill right now, isn't there?

MARLES: Yeah, but it's a good question and it's one that we're thinking a lot about. So, yesterday we released the migration strategy, for example, and this has been a really important piece of work, because there hasn't been a coherency to our migration plans for a long time. Really, we've had a lost decade in terms of thinking through how we should be using our migration system in the way which benefits our economy in the most significant way. And so what we're doing with the migration system is being much more focused on looking at skilled migration in the skills that we require, and that does enable business to have the skills that are required. It's a bit about migration, but it's also about training. I think what the pandemic really revealed is that over the last decade, we've really seen almost a skills crisis emerge in this country. And that's why we put in place hundreds of thousands of fee-free TAFE places to encourage more people to go to TAFE so as to get the skills that they require. To go to your specific question, though, you're right. There will be a security dimension to what happens down at the Osborne naval shipyard in building our nuclear powered submarines. It will need to be Australian citizens who are doing that work. But it's also a really particular skill that people will be required to have, be that at the tertiary level or at the trades level- it's a very specific thing to build a submarine and it's a very high-tech thing. And that's why we really are putting in place, if you like, the training infrastructure to make sure that we do the really massive task of giving people the skills that are required so that this can be done. But the upside of that is that when we get this industrial production line up and running, it will be one of the most high tech industrial production lines in the world, certainly the most high tech in this country. We're talking about thousands of jobs, but thousands of really smart jobs, and it's going to have a massive economic dividend for the country, but obviously for this state.

DENNY: Quarter to nine is the time. We are speaking with Acting Prime Minister Richard Marles, who's also the Minister for Defence. Via text, and I think this is a very obvious question, surely the main thing is to keep people currently working at Osborne in continuous work.

MARLES: Yeah, and that is a good point to make. And one of the recommendations that came out of the Defence Strategic Review that we released back in April was the need for us to maintain continuous naval shipbuilding in Australia. And that means continuous naval shipbuilding at Osborne. And that absolutely means retaining the skills that we currently have there. And it is really important- in a sense, the easiest skills to have are the ones that are already established and when we lose those workers, which again happened over the course of the Abbott-Turnbull-Morrison Government, what you were seeing was people with very high skills, particular skills, leaving the industry and often never coming back. When we look at the challenge that we've just been talking about now, that is an absolute own goal, which is why it's really important that we are retaining the workforce who are currently there. And whilst they, right now, some are working on submarines, some are obviously working on ships, there is some commonality between the two, but it's really important that what skills currently exist are retained.

DENNY: And so you're going to have to marry up the agreement to actually start construction with the conclusion of the work that's currently at Osborne.

MARLES: Well, I guess that's right. I mean, when we think about continuous naval shipbuilding, what we think about is the schedule, if you like, of what is being built at the particular yard at Osborne, such that we can maintain a relatively steady number of workers and in this instance, grow that. And we're going to need to grow that very significantly. What you're trying to avoid is what's described as valleys of death, and again, we've seen them over the last decade, and that just drives a truck through the skills base, and we can't afford that now. We really do need to be very careful in the way in which we're managing that. And so there's a lot of thought going into that.

DENNY: Just on the interview we've just heard with Finance Minister Katy Gallagher in AM with Sabra Lane. Mid-year budget review tomorrow, all the talk is about nearly $10 billion in savings. We are at a time when there are a lot of people really struggling day-to-day with power, with rent, the fallout from 13 interest rate hikes. Surely those people want to hear that there are going to be measures to make their life easier.

MARLES: Indeed. And we really understand the pressures that are on Australians right now, and on businesses. We've been experiencing internationally an inflationary environment. And we really need to be thinking about every way in which we can have a war on that inflation-

DENNY: So, what are you going to do to make life easier for those people who can't pay their bills?

MARLES: Well, I think there are two dimensions to this. Firstly, we need to tackle inflation. And the way we do that is by being prudent in terms of the federal budgets. I mean, we've done something the Liberals never did, and that's deliberate surplus. As the Finance Minister pointed out in the MYEFO, which will be released tomorrow, there's better part of $10 billion worth of savings and reprioritisation, and that takes to almost $50 billion the amount of savings and reprioritisation we've done since coming to power. By contrast, in the last liberal Budget, the amount of savings and reprioritisation was exactly zero. Now that's important because by being prudent in terms of our Budget management, we have the best impact in terms of fighting inflation in this country, and that is of benefit to everyone. Where we are engaging in spending, it is very much around targeted relief. This time last year, we put in place a $1.5 billion package to put downward pressure on power bills. And that has worked in the sense that power bills would be a lot higher now, but for what we did last year, and that was done in the face of opposition from the Liberal party. But be it that, be it cheaper medicines, be it more affordable childcare, we've been looking at focused, targeted measures which are about reducing the cost of living. So, it's twofold. We're focusing our spending on reducing or easing the burden on the cost of living. But overall, we're actually managing the spending of the federal budget in a prudent way, delivering a surplus so that we continue, or wage, if you like, a war on inflation.

DENNY: All sounds very lovely politically, Minister, bottom line. Two weeks ago we did a broadcast from a charity who have never been busier with people who are really struggling day to day. And these are the people who want to hear that their cost of living is going to drop or they're going to be in a stronger position financially to actually pay those bills. Now, it's all very well to say you're saving $10 billion and you're repurposing stuff. Well, those people who can't pay their bills would like you to repurpose so they can.

MARLES: Yeah. And the starting point here is we really understand the pressure that people are facing. I mean, this is an incredibly difficult environment. It's a difficult environment which has been experienced here as it is around the world, and there obviously isn't a magic wand which enables us to stop it right now. But what we can do and what we have been doing is spending each and every day focused on tackling this problem with a view to easing the pressure on Australians as best as we can. And what Australians can know is they've got a government who is thinking this through both in terms of fighting the underlying issue, which is inflation, and by doing that through prudent management of the budget, but also in terms of easing the immediate pressure, looking at ways in which we can reduce the cost of living. I mean, one of the most significant things in a moment like this is access to health. We've given the biggest increase in the bulk billing incentive in the history of Medicare, and that's come into effect in the last couple of months. That actually makes a real difference to people in this moment in terms of accessing their health now, it doesn't fix everything, and we're not suggesting it does, and we're not suggesting that this removes all the pain that's out there, but it does at least mean that there are more places that are able to provide bulk billing services so that people in this moment don't have to compromise their health. You can run that analysis through what we're doing in terms of providing for cheaper medicines- the 60 day scripts, which, for those people who have chronic conditions, which means they need to access ongoing medicines, that's a real saving for them. So, we are focused on the specifics and we are looking at ways in which, in a targeted way, we can make life easier. But we acknowledge this is a difficult time and that's why we're very focused on using every lever of power we can possibly pull.

DENNY: Richard Marles, Minister for Defence and Acting PM. Thank you for your time this morning.

MARLES: Thanks, Spence.


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